Courts Must Opt Out of Colorado’s Efforts to Destroy State Banks
In 1978 the United States Supreme Court fired the shot heard ‘round the consumer finance world. In a now overlooked case involving a dispute between a bank in Nebraska and one in Minnesota, the Supreme Court ruled that for a credit card agreement between an individual living (or traveling) in one state and a bank located in the other, the interest rates terms of the contract would be governed by the law of the state in which the bank is located, not the consumer.
The effect of the Supreme Court’s ruling (known since as the Marquette case) was to allow consumers residing in states with low ceilings on permissible interest rates, such as Minnesota, to obtain credit cards from national banks located in states with higher interest rate ceilings, such as Nebraska.
Read the full piece here.